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Now it's all or nothing on tax cuts

The doomed vote mean Democrats would ultimately need to strike a deal with Republicans. |
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“It became apparent the second time we met that actually there weren’t going to be any bipartisan negotiations to reach a decision until there had been a political catharsis on the Democratic side,” said Jon Kyl (R-Ariz.), who was tapped for a bipartisan working group led by the administration. “We’ve been very congenial with each other, but it’s been very clear that we’re not going to be negotiating anything until all of this political process is over with.”

Republicans voted unanimously against opening debate on either measure.

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Democrats were split, providing clues on how the caucus might vote on a compromise that would renew all the Bush tax cuts.

Sens. Joe Lieberman of Connecticut, James Webb of Virginia, Joe Manchin of West Virginia and Ben Nelson of Nebraska — all moderates — sided with Republicans on the bill limiting the tax cuts to the first $250,000 of income. Each senator has indicated in the past that they believe all the tax cuts should be extended.

It was the liberal wing of the party — Sens. Jay Rockefeller, Tom Harkin and Dick Durbin — that opposed raising the threshold to $1 million, signaling trouble for the White House as it looks to strike a deal with Republicans.

“It won’t get my vote,” Harkin said of a temporary, across-the-board tax cut extension. “The president should draw a line in the sand as he said many time in Iowa as he campaign, he drew that line at $250,000 and no more. He should stick with that and use his veto pen if he has to.”

Sen. Russ Feingold (D-Wisc.) voted against both measures because he opposed extending the tax cuts without paying for them.

It is unclear how many Democrats senators agree with Schumer and Harkin that the tax-cut fight is worth dragging into next year.

“There are lots of people who do have that appetite, there are some who don’t,” Schumer said. “We’ll have to see what happens.”

What it likely means is that any compromise will be a classic, middle-of-the-road deal, with votes pulled from both sides of the aisle.

"I don't think think we ought to go into the beginning of the year with Americans scratching their heads, wondering whether their taxes are going up,” said Senate Minority Leader Mitch McConnell (R-Ky.). “I think this is a decision the American people expect us to sit down together as adults and resolve. I expect that to happen."

The Saturday votes were also aimed at registering Democratic concern about the direction of White House negotiations. Administration officials stepped up their advocacy late this week for some initiatives that Democrats view as crucial, including $150 billion worth of less-publicized middle-class tax cuts, hiring incentives and an extension of unemployment insurance. But unease remained about whether the White House was too willing to concede Republicans without getting enough in return.

In 1990 the Democratic Congress decided they would punish the rich for being rich by slapping an extra 10% tax on the sale of yachts. Sounds reasonable - to a Democrat.

Well, sales of yachts dropped almost 90%. Some of the small companies that make the yachts had to lay off 80% of their workers, others filed for bankruptcy. All those middle class folks who worked for the yacht companies were thrown out of work and had to go on unemployment. All those towns and cities where the yacht manufacturers were located lost the revenue from the companies and their employees.

And the big kicker - the tax didn't raise any revenue. In fact, it cost the Treasury a lot of revenue paying all those unemployment benefits.

And the moral of the story is - when you raise taxes on folks, they don't just take it - they adjust their behavior to avoid the tax man. And the new behavior will likely have "unintended" negative consequences.

Now here we are twenty years later, and what have the Democrats learned? Well, nothing. They're ready to raise taxes again - the only question is on who and how high. Regardless of the answer, my prediction is that if the Democrats get their way, there will be three "unintended" consequences:

1) Unemployment will go up - even more than it already has

2) Revenue to the Treasury will go down - even more than it already has

3) The economy will decline even further

Why is it that the Democrats continue to perpetuate the same mistakes over and over and never seem to learn from them? Are they just too dense to understand, or is the destruction of the American economy their real goal?

Thirty years of trickledown economics has only resulted in a gross redistribution of incomes UPWARD. So much for claims of socialism ruining America.

It needs to end here and now. Democrats, and especially Obama, need to make a resolute stand. The people are behind such a stand and will reward them at the polls. But they must not back down or give in to the demands of the hedgefund billionaires, most of whom never created a job in their life.

The article says "Republicans used the president's words against him Saturday. In August 2009, Obama said during a visit to Indiana that "the last thing you want to do is raise taxes in the middle of a recession."

No - what the Republicans did is to point out that Obama says one thing when he's talking to one audience, then says the exact opposite when he's talking to a different audience. That's what the news media should be doing - but they only do it when it's a Republican president.

So - which is it, Obama. Should we raise taxes in the middle of a recession or not?

These are the same political surgeons who have systematically chopped off the financial legs of millions of average working Americans, and now they want to put us on a gurney and wheel us back into their operating room, and do another extreme makeover???

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Republicans are hypocrites on this issues pure and simple. It is nonsense that to keep taxes in place for millionaires will not harm them even in these hard times because they are not sharing in the hardship. They make the poor decision and then it is the middle class that pays the price with unemployment. And to characterize this as a tax increase is a lie. It is truly rather a matter of not letting tax reductions continue which should have never been enacted in the first place without figuring out how you are going to pay for or account for the decrease in revenue that these tax cuts bring.

What a JOKE. The Tax breaks have been in force for 10 years... So where did all the jobs that the “benevolent” wealthy made with all their "extra money"go? OVERSEAS. Now if they extend the tax breaks to people who DON"T need it, to feed their families, the national debt will go up. That’s OK though. The republicans don't care about that, only that the people that fund their political career stay happy.

I'm sick and tired of the uncertainty with these Democratic fools! They have played these games for two years and even after we threw them out of office in huge numbers, they still pretend that nothing happened.

I will be happy when Republicans run out the clock on the lame duck and we start January with some certainty and focus on jobs, unlike these morons that think the Dream act, DADT repeal and the Start treaty is more important than jobs.

We heard it well " What a bunch of chicken crap" this socialist group of dead duck congress has turne out to be with ms. mcCackle. of Missouri leading the coop. We need jobs and lower taxes and they want destroy jobs and raise taxes. I guess the people of America were not loud enough in November well just maybe by 2012 our newly elected lawmakers will find a way to shut down the illegal vote that reelected senators like rRied in Nevada and Boxer in California.

SHUT DOWN THIS GOVERNMENT TODAY AND START AGAIN NEXT YEAR. IT COULD SAVE THE TAXPAYERS FROM BEING BILLIONS IF NOT TRILLIONS OF MORE DOLLARS IN DEBT TO THE RED CHINESE. NO NEW TAXES, NO MORE BAIL OUT, NO MORE SPENDING AND NO MORE OBAMA AND MICHELLE JOY RIDING AROUND THE WORLD PARTYING AT TAXPAYER EXPENSE!

The people of America are suffering so why not the elite of Washington suffer a little of the pain.

I will be happy when Republicans run out the clock on the lame duck and we start January with some certainty and focus on jobs, unlike these morons that think the Dream act, DADT repeal and the Start treaty is more important than jobs.

Prepare for a rude awakening in 2011. Improvement of the jobs picture will require fiscal measures, which are not on the Republicans' agenda.

Making things more complicated is that there will still be a Democratic Senate and White House, so whatever bills the Republicans do pass will be substantially modified in negotiations with the Senate and WH or will not pass at all.

The key is to see what the effect of the Bush tax cuts were for those ten years. It is clear that the expected job creation of those cuts never really materialized. The fact is, not all tax cuts result in jobs just as not all tax increases result in more revenue or that all tax cuts result in less revenue. Not all tax cuts are equal. It is clear that large corporations and the very wealthy are sitting on more cash now than any other time in the last twenty years. I fail to see how shoveling more cash into these bank accounts will result in job stimulus. If the cash is there now and jobs weren't created, why would shoveling more cash in this "pit" result in more jobs. I think we'd be better off enacting some sort of MAJOR tax incentive or MAJOR tax disincentive for job creation. Either spend it on job creation and investment or lose it to Uncle Sam.

The key is to see what the effect of the Bush tax cuts were for those ten years. It is clear that the expected job creation of those cuts never really materialized. The fact is, not all tax cuts result in jobs just as not all tax increases result in more revenue or that all tax cuts result in less revenue. Not all tax cuts are equal. It is clear that large corporations and the very wealthy are sitting on more cash now than any other time in the last twenty years. I fail to see how shoveling more cash into these bank accounts will result in job stimulus. If the cash is there now and jobs weren't created, why would shoveling more cash in this "pit" result in more jobs. I think we'd be better off enacting some sort of MAJOR tax incentive or MAJOR tax disincentive for job creation. Either spend it on job creation and investment or lose it to Uncle Sam. Given those choices I"m quite sure where the $ will go. Without it, I'm not convinced it will go anywhere except an already wealthy individual's or corporations' balance sheet.

Tax cuts are NOT going to help as long as there is corruption and stock market manipulation. See the movie "Stock Shock-The Short Selling of the American Dream" for a look at how things really work. If you are on a budget, buy the movie at the site www.stockshockmovie.com and save a few bucks. It is an education we all need.

Why not allow the Bush tax cuts to expire as they were intended to do by the GOP. Then reform the tax policy and give the most deserving a break. Target tax incentives as a way of adding jobs and cleaning up the environment.